Filed under the “Too important not to blog but kind of meh news” department comes word that TiVo has hooked up their TV service to Amazon’s eCommerce services. In what appears to be a move towards t-commerce, real-time merchandising is now a reality. Let’s start with some history:
Jennifer Aniston’s Sweater refers to a concept whereby a viewer, enjoying some random episode of the hit show Friends (I said it was history), takes a hankerin’ for the sweater Jennifer Aniston is sporting. Deciding that they must have said sweater, they click a button on their remote, highlight Jennifer’s Sweater on the TV, click “Buy” on their remote, and ‘poof,’ it shows up at their house within 48 hours.
This concept got a lot of play in the late 90’s as Web-based TV startups DEN (Digital Entertainment Network) and Pseudo.Com sought to use technologies such as the (at the time) ubiquitous to “stream” postage stamp-sized video through people’s web browsers. The sites ran up huge cost deficits (bandwidth actually overshadowed production costs, if that can be believed), and both shuttered even before the dot-com bubble burst, despite sponsorship deals from Starbucks and other mainstream ‘engagement-focused’ brands. Before they shut down, and desperate for monetization models, DEN and Pseudo were also trying to find other ways to offset production and (more urgently) distribution costs and tried adding eCommerce to their offerings. It didn’t work.
Seeing the Internet as a tremendous threat to their share of leisure time, the entertainment industry was beginning to panic about finding ways to extend value into these new, interactive networks. ABC bought the InfoSeek and GoTo.com portals, rebranding the new mix as go.com. NBC picked up Snap.com in 1998 to launch them into the online world, and had already forged the MSNBC partnership to bridge their news offerings across Web and TV.
When it came to iTV (Interactive TV), the idea was simple: Split this new way of consuming TV into two categories. There was iTV, or single screen interactive Television, and there was eTV, or enhanced “Two-screen” Television, where viewers would watch shows on their normal Plain Old TV, and enjoy synced content on a laptop or other computer in the same room. Only CBS, under the stoic and visionary leadership of Sumner Redstone and Les Moonves stayed out of the fray while ABC, NBC and FOX all sought to use fragile 3rd party technologies such as Wink.
The short of it is that all the networks ultimately tried to find mechanisms to create eCommerce revenue opportunities. Partly fueled by its eCommerce experimentation, NBC bought ValueVision and rebranded it ShopNBC, hoping to buy into a streamlined eCommerce/operationally endowed organization it could integrate against. CBS did some of their own testing, but to give you an indication if its lack of success, this is what was what the New York Times said in July of 1999:
CBS sold thousands of copies of its ”Joan of Arc” video on cbs.com after broadcasting the mini-series last month, said Dana McClintock, a spokesman. On a broader level, the network’s stakes in Internet companies like Sportsline and Hollywood Online ”will provide an array of opportunities” in E-commerce, Mr. McClintock said.
”Right now, those opportunities are few and far between,” he added, ”but in the future there will be a lot of them.”
ABC tried to do the same thing in 2002 with Shop The Soaps (an effort in which I was intimately involved). HSN and ABC struck a deal that saw Daytime soap writers adding products to their narratives (mostly jewelry and some apparel). When the commercial break hit, ABC produced a 15 second sting designed to drive traffic to an eCommerce site linked from ABC.com. The promise was that viewers could ‘become part of the story’ by purchasing whatever it was that was revealed on the show.
One would think that this particular audience would be primed for this offer, but the site didn’t do enough revenue to even cover the cost of the 15 seconds of airtime we displaced with the promotional message.
With all of this said, people do buy stuff from TV. HSN and QVC combined represent about $7Billion US in sales, with about 15% of that generated from their Website. By contrast, according to eMarketer, eCommerce as a whole, excluding travel, generated around $130Billion during 2007 in the US alone.
So if TV viewers are buying stuff, why hasn’t this worked in the past? To start, HSN, QVC and ShopNBC viewers are watching with the intention of at least considering a purchase. Most viewers watching a TV show for entertainment aren’t really in that mindspace. Even interactive TV experiences such as what Wink offered in the early part of the decade were largely ignored by most folks, which is one of the primary reasons it hasn’t been incorporated into the richer experiences of iTV today.
See if this sounds familiar(TiVo Press Release):
“Product Purchase adds a whole new dimension to the TV viewing experience,” said Evan Young, Director of Broadband Services for TiVo Inc. “By teaming with Amazon.com, TiVo enables viewers to purchase products related to their favorite TV shows or that they’ve seen in TV ads without leaving their couch. For example, if a guest on the Daily Show or Oprah has a new book, CD, or DVD out, you can purchase it on Amazon.com using your TiVo remote without missing a second of TV, whether the viewer is watching live or recorded. The viewer with an impulse can buy right away and no longer needs to remember to do so the next time they are at their PC. Television advertisers and consumer products companies are no longer limited to the traditional linear shopping channels that require live viewing for product merchandising and fulfillment — if their product is seen or advertised on any TV show or network, and sold by Amazon.com it can be merchandised to viewers through TiVo.”
“Starting today, TiVo will launch the new service to consumers by merchandising products related to several high profile shows, including but not limited to The Oprah Winfrey Show, The Ellen DeGeneres Show, The Colbert Report, and Burn Notice.”
What’s not mentioned there is what ArsTechnica points out:
[TiVo] devices are, after all, in only about 4 million households.
While the technology has changed slightly – the ease of real-time payment is a big one, as is the innovation TiVo provides by ‘pausing’ a show while the transaction is completed, the mental model that consumers have regarding their leisure time and entertainment consumption hasn’t. I will be anxious to see how this pans out; However, the short of it is that I don’t believe in the transactionalized entertainment model. All my experience suggests that people watch TV to be entertained. That said, I believe that people will someday shop through their televisions, as they will through all internet enabled devices, but shopping by narrative hasn’t worked on the Web, nor has it worked on TV. I don’t think it will for the foreseeable future.